- Sterling slips in spite of GDP data beating forecasts
- USD expected to strengthen on US GDP
- Markets poised ahead of next week’s central-bank-fest
Interestingly, the twin news stories that the UK economy slowed less than forecast in Q3 and that Nissan has decided to keep jobs in Britain with their new Qashqai and X-Trail models failed to boost Sterling. As has become the norm, the negative stories stole the show. Assertions that the UK government must have bribed Nissan (in the non-legal sense of the word, I suspect) are everywhere and there is so much comment that any decline following the EU Referendum is a bad thing rather than an inevitable knee-jerk reaction. We also heard that UK consumer confidence slipped from an index reading of -1 to -3 in October; and that also weighed on the Pound. Sterling slipped a little on the day and remains unreasonably oversold on any technical measure.
This morning brings EU industrial confidence data and we are expecting an index reading of -1.6, which is largely the same as the September reading. The Euro remains overvalued in my humble opinion and is ripe for a reversal of some description. Looking ahead, next week brings the EU GDP data for Q3. I suspect the Euro will tread water today ahead of that.
US Q3 GDP data is due for release today. That will be the first estimate of the US’s third quarter economic performance and the forecasts are very upbeat. Anything between 2.5 and 3 percent is likely and the already ridiculously strong US Dollar may well further strengthen on the news. Beware if you are a USD buyer. Next week brings the Federal Reserve’s interest rate decision and there is still the chance of a rate hike. It also brings the October employment report and that will be influential.
Several central banks will be active next week with meetings in Australia, America and Japan and comments from central bankers in Canada, the UK and Europe. Volatility is certain.
And a man who was having an affair with his housemaid in Kuwait has been caught after the family’s parrot started repeating some of the things he said to her while they were being amorous. His wife had suspected something was going on but the comments from the parrot just proved to be the last straw.
Oh, and clocks fall back on Saturday night, so we’ll catch up with you an hour later on Monday, or is that an hour earlier? I can never work that one out…
John had farmed a small ranch in Montana for forty years. The Montana Employment Department queried his returns and claimed he was not paying proper wages to his workers. They sent an agent out to interview him.
'I need a list of your employees and how much you pay them,' demanded the agent.
'Well,' replied John, ‘That’s pretty simple. There's my ranch hand who's been with me for 3 years. I pay him $600 a week plus free room and board. The cook has been here for 18 months, and I pay her $500 a week plus free room and board. Then there's the idiot. Now he works about 18 hours a day, seven days a week and does about 90% of all the work around here. He makes about $30 per week, pays his own room and board and I buy him a bottle of bourbon once in a while.’
‘That's the guy I want to talk to,’ says the excited agent.
‘You already are,’ said John.
Today's Major Economic Releases
US: Advance Gross Domestic Product
||US: Advance Gross Domestic Product Price Index
||US: Employment Cost Index
||University of Michigan Revised Consumer Sentiment
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Daily Currency Analysis by David Johnson
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